New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-08-19
A CALIFORNIA WHEAT DEAL
FL00 DIS AND MAOKA US VASTLOsSES
FROM SIX TO EIGHT MILLIONS SUNK.

ENDING IN A GREAT PANIC.
rrRoM THE REGULAR CORRESPONDENT OF THE rnrsuxEl
SAN FRANCISCO, Aug. 9.-The history of tho great
California wheat deal, which has just ended 90 dis
astrously for tho bonanza firm of Flood e. Mackay,
presents more curious features than the Chi.
cago wheat corner that collapsed 20 ddenly last
month. What gives it added interest is tho facs
that the greatest efforts have been made to bettls
the losses sustained by the bonanza clique and to
keep prominently IL tho foreground the figure.
heads that represented the millionaire manpulat-
ors. Certain journals here that can be hired 10 do
any dirty work in bosteripg up deal printed
elaborate articles to show that tho deal vas
founded good business principles, because of tho
shOrtuess of the wheat crop in California and the
discouraging reports from Great Britain aud Iuda.
The Chronicle the only San Francisco
newspaper that had the nerve to declare
at the outset that certain ruin would follov
| the attempt to corner Californin's grain crop
this year, and its predictions were verified almost
TO the letter by the collapse last week OF the two
chief bulls who represent the bonanza milliouares
A peculiar feature of the deal, however. Is that
not a single local newspaper has given any of tie
inside facts OF the deal which show how far-resct
ng the crash is and how narrowly Bonanza Kings
Flood and Mackay were saved from utter ruin. 10
may be promised. for the benefit OF the Casters
reader who is not familiar with the workings Of ths
stock market In Sau Francisco, that the Nevadx
Bank is the great fountalu-head of speculative
activity in this city. 1t was bat by Flood and
OBrien in the heyday of Comstock excitement.
when millions poured in upon them every week and
when the curbstone broker lived like prince and
dreamed of palace on Mob Hill When the crash
came OIL the Comstock the members of the bonanza
frm-FloOd, Fair and Mackay-sett!ed down to
more legitimate business. They held on to the
af Is,rr
enue for five years by a system of assessments aue
petty deals which took $100.00O,DO0 out Of
the pockets of the working men and women of San
Francisco. Then when TINS source of revenue be
gan to fail they started in various other specut
tive and industrial enterprises. Wheat, nextt
gold and silver mining stocks. seems to have tae
greatest attractions for the California spcculat,r-
So the three millionares, whos combined fortune
probably represented forty millions. entered tue
wheat arena. OF these three men Mackay aud Far
were practical miners while Flood was credited
with great shrewdpess in bnsness and was TO
garded as the finaUcier of tie firm.
That their business capacity has been greatly
overrated, however, is demonstrated by their ~
peated losses in the wheat market. Hero tncy met
long headed operators. and not having the sa me
advantage of nside Information in their mining
stock deals they have been worsted in every one OF
the four deals they have made They first started
in as hears wheat, bat were "cinched unmer-
cifully by the alvance that resulted from short
crop Then the next season tney changed oil aud
tried to bull wheat. but again met with failure bs-
cause of phenomenally larae crop. They invested
heavily in warehouse property at Port Costa. an
tho Nevada Bank came to bs recognized as power
in this field, although shrewd operators de-
clared that unless better mana cement was shova
the bank would always como out on the wrong side
Ma Lat
wheat alone except in Q legitimate way. and do
voted themselves to big corner on juts grain bags
They fondly hoped they had cornered the worlds
supply, but they discovered their mistake when
they had between five and six millions invested
and they paid Just S4OO 900 in clean cash for this
bit of exr rerience Then came this years gigantic
and senseless deal, involving losses which certainly
are not less than from 900, 900 to $s 900, 600.
aud may exceed even the larger of those sums.
Three months ago from inside source | OBJ
taneI the plan of the bonanza millionaires-that 10
to say. of Flood aud Mackay; ex-senator Fair for
two years has been out of the Nevada Bank. He
retired because he could not get along with
Mackay. Flood gave him the option of buying out
both himself audI Mackay OF letting them pur-
chase his share. He chose the Inter course, and
with the money realized be bought the South
Pacific C0as. Railroad, Which runs from here to
Santa Cruz, and which he has just sod to tho
Southern Pacific Company at profit OF million
and a half Meantime Flood had put 80, 100000
into a gorgeous brownstone palace on Nop Hill and
abont $1,000 600 into a business block at the
corner of Fourth and Market SITS. As for Mackay,
according to estimates of men here most familiar
with his affairs he was never worth over eighteen
millions Nearly one-half of this has been absorbed
in his cable aud telegraph speculation, which is
unremunsrative. Besides, he lost heavily on mis-
Texas railroad, on previous wheat speculatiOns on
a speculation last year in bags, AMI on unremIner-
.tiye mines. He had therefore probably loss than
nine millions of productive capital when he began
the present wheat deal. 1t 10 believed that he has
felt the need of some bold speculation to recoup
pre- vious losses and also that he has been held up
a, so enormously rich by the newspapers that nc
has felt the necessity of some big stroke to enabs
him to come somewhere near the standard they SOS
for him.
This then, was the situation when Flood and
Mackay entered the arena last April Their plan,
as detailed to me then, was this: 10 first corner
every bushel of wheat that was to be secured in
Chicago always Of course working under igurs-
heads so tnat their identity should not be known.
When wheat reached 81 bushel to unload. and
with the profits of s., ,500 900 which they expected
TO make, 70 boom all the Comstock and other min
ing shares here and give San Francisco such stock
excitement as it had not enjoyed since 1876. 10
throw three or four millions into the NOR bnnd
stock market tnsy knew would give an Immense
ND ward tendency to every thing from legitimate
uine 10 the merest wildcat" From this deal they
confidently OK pscted to clean up $j,0oo,OOo. ThIs
was to be accomplished by the Fourth OF July.
Then, flushed with triumph on both fields they
would rush into the wheat riag in San Francisco,
force grain up to an uuexaniped figure, aud bJ
cornerng the whole supply of old wheat force all the
short brokers to agree to their owu terms before
the ie~ wheat came in. Nothing less thaa
SO. .OOo OCO was az xpected from this deal
It was mighty pretty scheme, and with the
knowledge of the large capital Of the Nevada Bank
it did not seem mpo ssDe to accomplish it. Here